Wall Street little changed as financials drop, defensive stocks gain

Vigorous trading is back now on the 2^nd trading day after the holiday with nearly 8 billion shares changing hands with the Dow nudging down a very modest 20 points as investors continue to lose confidence in the Trump agenda.  But this loss of political confidence is more than compensated by a gain in economic confidence as the VIX registers it lowest levels in two decades.  The banks got hit today on concerns that deregulation will not happen, at least not for a while.  Giants JPMorgan and BofA both warned of lower revenues due to lower volatility (aka lower trading.)

Wall Street slips as energy, financials lose ground

Oil is back in the news with crude falling on concerns that recent output cuts will not reduce the global glut, thus sending the Dow down 50 points.  But consumer spending is up and the economy as a whole deemed comfortable, thus raising the likelihood of an interest rate hike in June.  But trading remains exceedingly light in this first post-holiday market day with only 5.7 billion shares.

Succinct Summation of Week’s Events for 5.26.17 (plus Birth of the Solar System)

It's that time of week again with the summary showing new highs for all the indexes and a significantly upwardly revised Q1 GDP.  The bonus this holiday weekend is a cool little video animating the first 8 billion years of the universe, aka the birth of our solar system.  Enjoy and hope everyone had a great holiday.

Happy Birthday, Dow Industrials Average!

For your holiday pleasure, below is a cool graphic illustrating in one eye-shot the entire 121 year history of the Dow, with some interesting emphasis on the lengths of recovery periods from recessions and depression.  A little history now and then is healthy for perspective.  Continue to enjoy the long weekend.

Your Summer Reading List - The Big Picture 5/27/17

It's Memorial Day weekend and time to take stock of all the best financial reading to take to the beach as we embark on the sun-drenched days of summer.  This list of 15 titles contains some fascinating studies including 18th century mathematics, a 21st century History of Tomorrow, a 22nd century Industries of the Future, and treatises on George Washington, Benedict Arnold, Teddy Roosevelt and Eisenhower.  They all sound so interesting I for one can't wait to get to them.  Enjoy your holiday!

Wall St. drifts before long weekend; consumer stocks up

Things have slowed quite a lot with the holiday weekend here.  The indexes scarcely budged since most traders have left town.  Volume was exceedingly light at 5.2 billion shares but this is not at all unusual for a holiday weekend.  The good news is all of last week’s losses have been recovered and investors have taken fear of recession off the table.  Today’s GDP report has the economy growing at 1.2 percent in Q1, 70 percent higher than previous estimates.  Not a bad way to start a holiday.

Wall Street hits record highs, helped by consumer stocks

It was just two weeks ago that the market crashed 150 points with retail stocks taking a drubbing from Amazon.  Not that anything’s changed all that much.  Retailers continue to perform poorly relative to Amazon.  But today several major retailers including Best Buy, Tommy Hilfiger, and Sears turned in big gains driving the entire sector up 1.6 percent and the Dow up 70 points, also giving all the indexes their sixth consecutive gain wiping out last week’s crash.  The VIX is now below 10, a two-week low, and the consensus is that complacency, not fear, now dominates the market.  The consensus is also that without the much vaunted promise of Trump’s tax reform, more upside will be difficult.  At 6.4 billion shares traded, volume was much closer to recent averages.

S&P 500 hits record high close following Fed minutes

It’s an old song.  First the Fed says they’re planning a rate hike, then backpedal by saying there won’t be one until the evidence is stronger that the economy can take it, even though they think the evidence will be there for a rate hike.  This has happened over and over the last couple years and each time it triggered the same response from the market that happened today – schizophrenia with the Dow bouncing back and forth all day in a 90 point range with investors trying to decide which scenario they want to believe.  In the end, the index ended 75 points up but, on still well below average volume of 6.1 billion, investors are staying on the sidelines waiting for what’s next. 

Wall Street rises on investor relief after Trump budget

Though there was a slew of not terribly great economic reports today, plus President Trump’s new budget that is widely seen as having no chance of getting through Congress, the Dow still ended up 43 points on the simple basis that the new budget at least contained no surprises and delivered on the promises he made to his base, though that base is a minority.  Still, anything Trump does these days that remains faithful to his pro-business campaign promises is generally being taken as a positive by the market.  The flip side of all this of course is that volume remains considerably below average at 5.9 billion, so a great many investors remain on the sidelines waiting for what’s next.

Wall Street ends up; defense, tech stocks a boost

Mon, 5-22-17
Today it took a $350 billion dollar weapons sale to the Saudis to shoot the Dow up 90 points.  Needless to say, it was also a big shot in the arm to the entire defense sector, adding a boost of confidence to the Trump agenda and lowering the VIX to its pre-panic levels from last week.  However, the uncertainty that continues to pervade the environment keeps much capital on the sidelines as was evidenced by the rather tepid volume of only 5.9 billion shares.  Still, the market seems to be enjoying the fact that we’ve had three days in a row now without any new scandals.  So far,  so good, for Trump’s first overseas trip.

Succinct Summation of Weeks Events 5.19.17 (plus cognitive bias)

Below please find the usual weekly summation.  The bonus this week is an equally succinct graphic showing the latest on decision-making biases and how to survive them to make better decisions, an invaluable tool for investors.  Hope everyone had a great, if wet, weekend.

50th Anniversary Sgt. Pepper’s Lonely Hearts Club Band

Let's have a little fun this weekend.  Any Beatles fans out there?  (Silly question!)

50th Anniversary Sgt. Pepper's Lonely Hearts Club Band - The Big Picture

Wall St. ends off session highs after fresh Russia probe reports

It’s half a dozen of one, and six of the other.  Today new reports that paint an even bleaker picture of the Trump/Russia controversy would have thought to cause another sell off, instead triggered a new rally pushing the Dow up 141 more points. It seems investors are relieved that the president is leaving the country, the sentiment being that it’ll be a break from all the scandalous headlines.  So the market’s up until the second question emerged that nobody’s sure what he’s going to do out of the country, raising what one expert described as “two days to wring our hands about what might happen.”  Whether this is a break or just another occasion for more tension seems to be a matter of individual perspective.  For now, the market’s up roughly half way from Wednesday’s big tumble.  If the trip goes well, it may go up further.  If not … ?  Volume was still above average at 7 billion.

Wall Street rebounds after steepest selloff in months

U.S. regulators gave the go-ahead to pursue a Republican plan to reverse the 2015 Internet “net neutrality” order and this gave the market a new modicum of confidence that maybe the majority party is capable of getting something done.  Thus the Dow rose 56 points, but not before swinging back and forth in a 200 point range all day, demonstrating that the atmosphere of uncertainty is still very much present.  The appointment of the special counsel was probably seen as a relief that contributed in a positive way.  Volume for the second day was way above average, just shy of yesterday’s at nearly 8.2 billion.

Wall Street tumbles as reform hopes fade with Trump crisis

For months the conventional wisdom has been that, as the market has been going up and up and up with post-election fervor in the hopes of Trump reforms, there would come a day when either things had to start happening or the house of cards would collapse.  Today was the day that investors lost patience with the distractions from the White House and lost confidence in the president’s ability to deliver.  The Dow crashed big time 130 points at open and continued the slide all day to close a whopping 372 points down.  The VIX shot up to 15.3, its highest in a month.  Maybe this is just a correction from a very over exuberant market or a beginning of a return to the pre-Trump market.  To make Wall Street happy, Trump needs to deliver good news soon, and today there was little confidence that that’s ever going to happen.  Volume was very high at 8.3 billion, the highest in two months.   

S&P 500, Dow end session flat, tech boosts Nasdaq

Another wild and crazy day with the Dow shooting up 50 points right out the gate and then almost immediately crashing a hundred points before spending the rest of the session gradually recovering to close almost even.  What is going on is investor concern about weak consumer spending as reflected in the tepid retail numbers.  If consumers have slowed their spending, how do we sustain this economic growth?  Add to that continuing concern about Trump’s ability to put an end to all the distractions and concentrate on tax reform and you have on an hour-to-hour basis a rather schizophrenic market environment.  The global hack that started Friday isn’t helping matters either.  Volume continues below average at 6.4 billion shares.

Wall Street rises with help from technology, financial, energy stocks

Oil drove the numbers today as the Dow shot straight up right out the gate and stayed there after the Saudis and Russia announced that supply cuts would continue, also shooting crude up given the tenacity of the glut problem that has been dampening the energy markets for some time now.  Good housing data also promoted optimism and the Dow closed 85 points up, though investors are still looking for more evidence that the economy hasn’t peaked.  Volume was below average at 6.3 billion shares. 

Succinct Summations of Week’s Events 5.12.17 (plus "Sell in May")

I have been waiting five days to make this post so that I could share Wednesday's very interesting submission from our friends at Heritage Capital Research concerning the whole phenomenon about "Sell In May and Go Away," especially in view of the fact that it was a topic of discussion at our last MRI meeting.  This author offers a different perspective, arguing that though traditionally "Sell in May and Go Away," may work in theory, in this particular market at this particular time it's probably not a good strategy.  Very interesting reading.  And, as always, I also offer the usual weekly summary.  Hope everyone enjoyed this very pleasant weekend.

Wall Street falls, department stores take a drubbing

There was a 150 point panic in the market yesterday morning when Macy’s and Kohl’s turned in poor reports.  So all eyes were on today’s retail report, hoping it would reveal that purchasing habits had merely shifted rather than declined.  No such luck.  The much anticipated report showed that consumer spending was indeed slowing and that the retail sector was in trouble.  This sent more shock waves to those fearing that less consumer spending will translate to slower growth.  Fortunately most of the shock was absorbed yesterday with today’s Dow sinking a very modest 22 points.  Volume was also lighter than average at 6.1 billion shares.  Today’s report does however fuel concerns that the S&P at 17.6 times earnings is overpriced and due for a drawdown.

Wall Street slides as investors fret about retail

This morning the Dow sank almost 150 points right out the gate on bad news from Macy’s and Kohl’s portending more bad news from tomorrow’s retail report.  Even though economic reporting has been overwhelmingly positive, with the market so overbought, investors are looking for more good news to justify the high prices.  After the initial panic, the index came back steadily throughout the day to close just 23 points down.  Still the question remains:  have consumers really slowed their buying habits this dramatically or have they merely shifted to online shopping?  Tomorrow’s data will shed more light.  Like yesterday, volume was in line with recent averages.

Wall Street mixed after Trump fires FBI head; Nasdaq hits record high

Comey’s firing is being taken by investors as just another of many distractions from tax reform and again raising the question of the president’s ability to be focused on the important issues.  Thus the Dow dove 90 points before recovering late in the session to a 32 point loss.  With Q1 nearly over, all eyes now are on Friday’s retail report.  The market is looking for continued positive data to justify the high prices.  Volume remained about average at 6.7 billion.

Wall Street loses oomph but Apple crosses $800-billion mark

First the Dow was up 35 points right out the gate, then crashed all day long over a hundred points before finally zooming in the final half hour to close 36 points down.  Despite this, the S&P reached a record high intra-day and Apple made the historic crossing of the $800 billion mark in capitalization.  Q1 and France continue to give investors confidence but U.S. stocks being valued so much higher than average has also given the markets pause.  Improving earnings and the hopes for tax reform are driving the indexes.  Volume was about average at 6.7  billion.  

Wall Street flat; fear barometer falls to 1993 low

Very little movement in the market today as investors expected the victory in France over the weekend and since that’s exactly what they got, there was no place to go.  So the Dow rose a mere 5 points.  The “fear” index has dropped to its lowest point since 1993 meaning investors are comfortable with the state of the economy and the market, but maybe a little too comfortable.  Today’s expert is saying that the very low VIX may be “signaling that something negative is in the works.”  And with the S&P trading at nearly 18 times earnings, there should be something negative coming.  But the major indicators remain strong so, as another expert put it, “We remain largely constructive of the equity market.”   Volume was below average at 6.3 billion.

Succinct Summations of Weeks Events for 5.5.17

The usual Sunday night succinct weekly summary is supplied below.  One thing that has transpired since this was published Friday was the overwhelming election victory in France of centrist leader Emmanuel Macron who soundly trounced opponent Le Pen by a 2 to 1 margin, much to the relief of the EU and markets around the world.  This Sunday I'm including the narrative weekly summation from Heritage Capital Research as I think it does a particularly good job of explaining last week's events.  Hope everyone had a great weekend!  Stay warm, it's going to freeze again tonight.

Stock returns annualized average of 11.8%

Now that we finally have some decent weather, I'm going light on the weekend reading but I thought the chart below was rather interesting.  I always like the way Barry Ritholtz always cuts right to the heart of the matter.  Enjoy the sunshine while it lasts.

S&P 500 hits record on rebound in U.S. job growth, energy shares

Despite diving nearly 50 points early in the session, the Dow recovered all throughout the day and even closed a respectable 55 points up.  What moved the dial today?  It was the same thing that moved it yesterday, just in the opposite direction.  Yesterday the index dove because OPEC said there would be no further curtailment of output.  Today the index rose because OPEC said they would be continuing to cut crude supplies after all.  Additionally, the jobs report was stellar, 2-1/2 times the gains from March and, of course, energy stocks got a big bounce.  The consensus:  “perhaps the economy is OK. “  Volume was little below average at 6.5 billion.

Wall Street ends flat as health bill passes; energy slammed

Except for an almost 100 point drop that happened about mid-morning and lasted about an hour bouncing right back, it was a pretty smooth day without much movement and the Dow settling down just 6 points.  The House repeal of the ACA and the continued success of Q1 did not move the needle at all.  What did move it was OPEC declining to take further steps to reduce the global oil glut which has plagued the markets for some time.  But that impact lasted only a short while.  Q1 seems already priced in and the S&P earnings projections have been hiked once again today, this time to 14.8 percent.  Yesterday it was 14.2, 13.9 Tuesday, 13.6 Monday.  Volume was way above average at 7.8 billion.

Wall Street slips as Fed holds on rates; financials rise

Everthing that was expected for today happened so there was little change in the closing numbers despite the fact that the Dow swung back and forth in a hundred point range all day.  But the Fed held rates unchanged and Q1 continues gangbusters so, today anyway, no grounds for complaint.  It seems each day that the Q1 forecast gets brighter.  Today it was elevated again to 14.2%, up from 13.9 yesterday, up from 13.6 the day before that.  Volume continues inching higher each day above average, today at 7.3 billion.

Wall Street edges up on heavy earnings day; Fed on tap

A second consecutive day of not much movement as the Dow gained a modest 36 points as investors struggle with competing interests between continuing good Q1 reporting and difficulty making sense of Trump’s proposals, which appear good on the surface but present more questions than answers and raise disconcerting concerns about whether they can get through the Congress.  Q1 is going so well that estimates have been jacked again, this time to 13.9%, up from 13.6 just yesterday.  Volume was a little above average at 7 billion. 

Apple, tech lift Wall Street as Nasdaq sets record

A relatively uneventful day as the Nasdaq is boosted to another record high by gains in the big tech stocks while the rest of market sits on the fence awaiting more Q1.  There will be heavy reporting again this week and it is expected that they will continue to exceed expectations.  The VIX is at its lowest level in ten years and this is impressive considering the recent spate of tepid economic reports which have muted recent stock gains.  Friday’s jobs report is hoping to calm this.  The 6 billion share volume was below average.